Policy Spotlight: China’s Foreign Policy in Africa
The People’s Republic of China mediates its relations with SADC countries bilaterally and multilaterally. At a bilateral level China conducts regular state visits and has presence in five of the 16 SADC countries. Multilaterally, China engages SADC countries primarily through the African Union (AU), the triannual FOCAC, and to a limited extent through the BRICS grouping. This combination of institutions mediates Africa-Sino relations. However, security cooperation is done bilaterally with the relevant government or through the United Nations (UN). Despite the broad of array of what constitutes China’s foreign relations with the SADC region, most of the developmental or economic gains for both China and SADC countries are achieved through bilateral relations.But what is the foreign policy of China towards SADC countries in terms of economic, military, political relations? In addition, what is the balance of power and how can the balance be improved to in favour of SADC countries?
Economic Relations
China’s economic policy is governed by its 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China (2016–2020), which has 20 parts that focus on different aspects ranging from the development philosophy, economic development, social development, security and implementation[44]. The main objectives of the economic plan are to improve human capital, the environmental sustainability and strengthen domestic institutions[45]. Apart from the five-year development plan China also has specific policies such as Made in China 2025, which aims to improve China’s share of global trade and production whilst improving perceptions of Chinese goods[46]. Although these plans have a domestic focus, China’s foreign policy is directed at enabling and implementing these economic plans. China’s foreign policy towards SADC countries, and African countries more broadly, is drive by its interests to source natural resources and capturing markets for its exports.
China’s economic interest in Africa are primarily aimed at diversifying its sources of oil away from the conflict-ridden Middle East sources and expanding its exports. Despite having relatively abundant natural resources of its own, particularly coal and other fossil fuels, China has taken a decision to import natural resources from the rest of the world rather than exploiting its domestic resources due to the high cost of exploration and extraction[47]. Moreover, manufacturing is an increasing returns activity comparing to extracting resources which has diminishing returns because it becomes more difficult and more expensive to extract natural resources over time[48]. Hence, China’s engagement with African countries has been mainly driven by the imperative of securing natural resources[49]. China has been drawn by the relatively low cost of investing in natural resources and importing them, which is used to bargain with African countries who are at very early stages of development. Moreover, China has taken advantage of unstable socioeconomic conditions in some SADC countries in order to satisfy its energy needs and disguise its true interest in Africa by posing as a development partner[50].
In the mid-to-late 1990s when Western countries were leaving places like Sudan, China entered the market by investing USD 15.0 billion in a 1,500-kilometre pipeline and began importing Sudanese oil at a large scale[51]. This made the China National Petroleum Corporation the largest shareholder in the Sudanese energy sector. Similarly, after the civil war ended in 2002 Angola became China’s largest oil supplier and accounted for 15.3% of China’s total oil imports in 2007[52]. Although China presents itself as a more conscientious development partner for African countries with promises of mutual trade and economic benefits, the profile of Chinese imports from Africa illustrates the real Chinese interests. Chinese imports from SADC and Africa more broadly are strictly limited to raw natural resources. Oil is the main natural resource that China imports from African countries, including SADC countries.
Figure 1: China Imports from SADC
Source: UNCTAD 2018. UNCTADStat, United Nations Conference on Trade and Development: Geneva. Available At: http://unctadstat.unctad.org [Last Accessed: 30 August 2018].
Even though the relative proportion of oil imports has declined since 2014, this is mainly a function of the lower oil prices than a reduction in quantities imported. Oil products contributed an average of 55.3% of total Chinese imports from SADC from 1997 to 2014, which declined to an average of 34.1% from 2015 to 2017[53]. Oil, gold, copper, metals and pearls contributed 78.7% of total imports from SADC to China in 2017 which illustrates the real Chinese economic interests – natural resources[54]. Therefore, China’s economic foreign policy is driven by investment in natural resource exploitation in order to extract raw minerals from the continent and the region, especially oil. The converse of this relationship, China’s exports to the SADC region and the rest of Africa, consists of diversified manufactured exports including clothing and textiles, telecommunication and transport.
Figure 2: China Imports from Rest of Africa
Source: UNCTAD 2018. UNCTADStat, ibid.
Chinese exports to SADC are diversified with the top five products constituting less than a quarter of total exports. The top five exports from China to SADC constituted an average of 16.0% of total exports from 1997 to 2014, which increased to 19.0% from 2015 to 2017[55]. The top five Chinese exports to SADC include telecommunication equipment, footwear, furniture and parts, miscellaneous manufactured articles, and electrical machinery and apparatuses[56]. China exports mainly manufactured goods to Africa and imports raw minerals. Therefore, China’s economic foreign policy with SADC countries is almost identical to the highly criticised approaches of former European colonisers. However, unlike the former European colonisers China prides itself for not interfering with the domestic politics of African countries – at least not yet.
China also plays a vital role in terms of infrastructure development and investment in Africa. The particular appeal of China investment is that the financing comes at a lower cost (interest rates) and without the conditionalities associated with the traditional sources of public financing like the International Monetary Fund (IMF). In addition, due to limited access to certain technical skills and infrastructure construction experience in most African countries, Chinese financing is preferred because it comes as “a full package” which includes engineering, procurement and construction service providers (EPCs). But the specific practices of Chinese EPCs and financing undermine the gains of African countries.
Figure 3: China Exports to SADC
Source: UNCTAD 2018. UNCTADStat, ibid.
Chinese EPCs have been criticised for not making use of indigenous labour even for repetitive and less skill-intensive tasks[57]. In addition, Chinese EPCs have been criticised for shoddy workmanship and poor quality of their construction. For example, the Government of Botswana has been engaged in legal disputes for poor workmanship and project delays against Sinohydro (Pty) Ltd. Sinohydro was contracted to build a new terminal at the Seretse Khama International Airport and to for construction of the Dikgatlhong Dam which have both ended in legal battles[58]. Similarly, China has been criticised for cheating the state or having colluding in misappropriation of funds in the development of new cities in Angola. For example, the Nova Cidade de Kilamba outside of Luanda has remained unoccupied despite the exorbitant cost of USD 3.5 billion which was financed through resource-backed loans[59]. Nova Cidade de Kilamba is just one of many new cities as part of a deal championed by former President José Eduardo dos Santos to build new cities in Benguela, Namibe, Lubango and Malange which promised to deliver a million homes[60].
Figure 4: China Exports to Rest of Africa
Source: UNCTAD 2018. UNCTADStat, ibid.
Therefore, the infrastructure investments supported by China in the SADC region are not realising value for money despite the cheaper and obligation-free financing. Firstly, the attractiveness of “cheaper” Chinese financing does not take the quality of workmanship into account. The true cost of Chinese-supported infrastructure investments is much higher if the lifespan of new development is remarkably shorter and the quality is subpar. Secondly, the overreliance on Chinese labour means that there is very little skills-transfer and benefits for SADC countries. Thirdly, the perception of cheaper costs in terms of the interest paid disguises the true cost of Chinese financing because the costs are hidden through EPCs. Chinese EPCs have been criticised for poor quality workmanship due to cost-cutting measures and low-quality materials, and project delays which all works to increase their returns on the projects. Thus, the access to “cheaper” and non-conditional Chinese financing hides the unequal gains which favour China due to the contracting arrangements, sometimes at the expense of sustainable long-term development in SADC countries.
Military Relations
Over the last few decades, the Chinese military strategy has primarily focused on China’s domestic security with limited external engagements and missions since the 1940s. However, in more recent years China has been heavily engaged in UN missions and established its first external military presence. In 2015, China passed a law allowing the People’s Liberation Army to be deployed on overseas counterterrorism missions[61]. China’s external military engagements involve military operations other than war (MOOTW) in order to counter terrorism and other security threats to Chinese interests, primarily in Africa[62].
China built its first foreign base in Djibouti to secure its economic interests in the region and strengthening China’s geopolitical position[63]. In June 2017 the Chinese Deputy Prime Minister Zhang Yesui met with Djibouti President Ismail Omar Guelleh to discuss further expansion of China’s role in the country and the region[64]. The expansion of this relationship to matters of security should contribute towards stability in the country and the region given that relations between Djibouti and Eritrea have deteriorated after the recent US sanctions against Qatar led to Qatar withdrawing its peace-keep forces which were a buffer between the two countries. This is the only direct external military engagement by China and its first permanent external military base since 1949[65].
Apart from this, China is engaged in a number MOOTW through the UN institutions. In Africa, China has contributed troops and other personnel to UN missions in South Sudan (1030), Mali (395), Sudan (365), the Democratic Republic of Congo (218) and Western Sahara (12)[66]. Clearly China’s external military presence and focus is on Sub-Saharan African countries, which constitute 82.3% of its total personnel contribution to UN missions (2008 personnel, mainly troops and police)[67]. China’s approach and its involvement in the DRC is to support the government to regain control and uphold the December 2016 political settlement until the next elections, which are planned for 23 December 2018[68]. China prefers limiting its interference and supports regional institutions such as the AU and International Conference on the Great Lakes Region who are the primary mediators in the DRC conflict[69].
Political and Cultural Relations
Although China prides itself for not interfering with the domestic politics of foreign countries, the Communist Party of China (CPC) has established close relations with political leaders in African countries, particularly in SADC. In July 2018, the CPC hosted a two-day conference with 40 political parties from 36 African countries with the aim of expanding dialogue on the developmental path taken by African countries[70]. The CPC conference focused on political institutions and is seen as complementing the FOCAC Summit, which focuses on economic and trade relations. However, this can be seen as China trying to extend its influence beyond economic and trade relations by directly engaging political leaders.
The Minister of the International Department of the CPC Central Committee have vehemently denied speculations that China is trying to export its developmental model to African countries, affirming Chinese President Xi Jinping’s assertions that the policy decisions and developmental path of any country depends on its history[71]. The CPC has also invited a few political parties for training on building institutions and strengthening political organisations. For Example, a delegation from the African National Congress of South Africa attended such training in 1999[72]. Although the China prides itself for not interfering in domestic politics of African countries, its foreign policy has vindicated some repressive regimes and has been criticised for emphasising political strategies like the subordination of the military and government to the political party.
Before the rising influence of China in Africa, most countries relied on financing from the IMF and WB that provided conditional loans. Most of the conditions attached to financing included fiscal and political policies aimed at stabilising African economies, encouraging democratisation and liberalism. These policy approaches were often referred to as the Washington Consensus, because IMF and WB economists aimed at discovering the right set of policies to assist government pursuing economic development in the context of market failure[73]. But with the ineffectiveness of Structural Adjustment Programmes to resolving market failure prompted a change in the approach taken. The post-Washington Consensus policies shifted away from trying to resolve market failure and focused on resolving state failure, which was understood as the primary cause for market failure[74]. Hence, the post-Washington Consensus emphasises “good governance” in order to improve state institutions and the state’ capacity to provide public goods.
Regardless of one’s view on the success or effectiveness of these policy approaches and conditionalities attached to finance – the Washington Consensus and post-Washington Consensus were useful disciplining mechanisms. The “no strings attached” approach of Chinese financing therefore undermines institutional development and political discipline. In addition, this approach by China is akin to the widely criticised “Silent Diplomacy” approach of former South African President Thabo Mbeki, which vindicated a number of repressive regimes in the SADC by turning a blind eye towards poor political and policy decisions. Moreover, the “infrastructure for resources” approach taken by China undermines domestic state resource mobilisation and enables repressive regimes without requiring legitimacy. Whilst it is commendable that China is creating a counter-balance to the existing models of development and finance, it is problematic that the financing provided by China does not come with any governance requirements or criteria for political legitimacy such as reducing poverty, inequality and improving the livelihoods of African citizens.
Lastly, Chinese model emphasises the subordination of the military and government to the political party which is problematic in the African context since ethnic differences and competition to control natural resources is a major cause for conflict; resulting in militaries that are attached prominent personalities and political parties [75]. Moreover, the party army approach is very problematic in Africa given the ethnic divisions that were heightened by colonialism which still remain. The Chinese model seem incoherent with the history and realities of African countries. The political relations between China and SADC are therefore problematic in that they encourage political leaders to draw lessons from the Chinese experience even though the Chinese experience is incoherent with the African context.
How to Improve the Balance of Power in Favour of SADC?
From the foregone analysis it is clear that China’s economic relations with Africa are driven by the need to secure natural resources. This approach is no different from the colonial and post-colonial relations between African and European countries, particularly former colonisers. China’s increasing involvement in African peace-keeping is primarily to secure China’s economic interests rather than domestic political stability. Lastly, China’s political relations with African countries provides little gains for ordinary citizens because the Chinese model is not compatible in the African context. Moreover, the non-conditional financing approach risks legitimising and even enabling repressive regimes. Despite the failure of IMF and WB in resolving market failures in Africa, the conditionalities attached to loans encouraged accountability; which is being undermined by the current Chinese financing approach.
The balance of power between China and SADC countries can only be improved through greater civil society involvement and demands for accountability. Civil society organisations at a national level should demand transparency and accountability from political leaders. In addition, civil society organisations need to focus on value for money rather than commending the introduction of new infrastructure and investments. At face-value, new power stations and roads are typically commendable because they contribute towards development. But a deeper analysis of the value for money including the quality and lifespan of new infrastructure will reveal the true cost of Chinese financed infrastructure developments. This needs to be done at a domestic level by comparing existing and new infrastructure developments. In addition, a cross-country comparison would also reveal the development deficits because the gains from Sino relations are inextricably linked to each country’s bargaining power.
SADC countries in particular, and African countries generally, need to pool the negotiations and deal-making with China at a regionally rather than bilaterally in order to level the playing field. Although the China emphasises mutual gains in its relations with African countries, this is merely rhetoric because the deals are concluded bilaterally where China is at its biggest advantage. This is a rational approach for China given its overwhelming bargain power in bilateral negotiations with SADC countries. The balance of power can only be improved if investment and infrastructure deals are concluded at a regional level with the aim of connecting SADC economies and promoting industrialisation through the development regional value-chains. SADC countries need to pass terms of reference that are collectively agreed upon as the basis for any and all bilateral and multilateral negotiations with China. SADC countries will never improve their gains by engaging China through continental dialogues whilst concluding bilateral deals without any terms of reference to level the playing field.
By Siyaduma Biniza
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The September 2018 issue focuses on evaluating Africa-Sino relations and its impact on African development – What is the relationship between SADC countries and China? what is China’s foreign policy towards SADC countries? how do SADC countries benefit from their relationship with China? what is different in China’s relations with SADC countries compared to the rest of Africa? The PESA Regional Integration Monitor, Sep 2018 examines these questions.
